April 30, 2007

Obzilla

In
its landmark decision of
KSR v. Teleflex, reversing the appeals court,
the Supreme Court has broadened the interpretive scope of
35 U.S.C. § 103(a), the obviousness clause. Patentable subject matter is
thus constricted. In the large, in light of the ruling, a known combination of
elements are only patentable if their combined functionality yields the
unexpected. What was once impermissible hindsight is now permissible.

A unanimous opinion delivered by Justice Kennedy -

Section 103 forbids issuance of a patent when the differences between the
subject matter sought to be patented and the prior art are such that the
subject matter as a whole would have been obvious at the time the invention
was made to a person having ordinary skill in the art to which said subject
matter pertains.

In Graham v. John Deere Co. of Kansas City, 383 U. S. 1 (1966), the Court
set out a framework for applying the statutory language of §103, language
itself based on the logic of the earlier decision in Hotchkiss v. Greenwood,
11 How. 248 (1851), and its progeny. See 383 U. S., at 15-17. The analysis
is objective:

"Under §103, the scope and content of the prior art are to be
determined; differences between the prior art and the claims at issue
are to be ascertained; and the level of ordinary skill in the pertinent
art resolved. Against this background the obviousness or nonobviousness
of the subject matter is determined. Such secondary considerations as
commercial success, long felt but unsolved needs, failure of others,
etc., might be utilized to give light to the circumstances surrounding
the origin of the subject matter sought to be patented." Id., at 17-18.

While the sequence of these questions might be reordered in any
particular case, the factors continue to define the inquiry that
controls. If a court, or patent examiner, conducts this analysis and
concludes the claimed subject matter was obvious, the claim is invalid
under §103.

6,237,565, controlled by Teleflex (exclusive licensee), went to a car gas
pedal using a combination of features, where each individual feature was known
in the prior art, but never combined as claimed in '565. In summary judgment,
applying the Graham factor test, '565 was found obvious by the district court,
thus letting KSR off the hook for infringement; a ruling overturned by the CAFC;
now with the appeals court ruling reversed; in essence, the district court got
it right.

The CAFC had developed, by its own precedent, a "teaching, suggestion, or
motivation" (TSM) test as a basis for determining obviousness. The TSM test was
a guard against what was considered "impermissible hindsight," a pernicious
problem that an invention seems obvious when viewed after the fact.

Seeking to resolve the question of obviousness with more uniformity and
consistency, the Court of Appeals for the Federal Circuit has employed an
approach referred to by the parties as the "teaching, suggestion, or
motivation" test (TSM test), under which a patent claim is only proved
obvious if "some motivation or suggestion to combine the prior art
teachings" can be found in the prior art, the nature of the problem, or the
knowledge of a person having ordinary skill in the art. See, e.g., Al-Site
Corp. v. VSI Int'l, Inc., 174 F. 3d 1308, 1323-1324 (CA Fed. 1999).

With principal reliance on the TSM test, the Court of Appeals reversed.
It ruled the District Court had not been strict enough in applying the test,
having failed to make "'finding[s] as to the specific understanding or
principle within the knowledge of a skilled artisan that would have
motivated one with no knowledge of [the] invention' . . . to attach an
electronic control to the support bracket of the Asano assembly." 119 Fed.
Appx., at 288 (brackets in original) (quoting In re Kotzab, 217 F. 3d 1365,
1371 (CA Fed. 2000)). The Court of Appeals held that the District Court was
incorrect that the nature of the problem to be solved satisfied this
requirement because unless the "prior art references address[ed] the precise
problem that the patentee was trying to solve," the problem would not
motivate an inventor to look at those references. 119 Fed. Appx., at 288.

That it might have been obvious to try the combination... was likewise
irrelevant, in the court's view, because . . "'"[o]bvious to try" has long
been held not to constitute obviousness.'" Id., at 289 (quoting In re Deuel,
51 F. 3d 1552, 1559 (CA Fed. 1995)).

The Supreme Court reviews everything de novo, with no respect to lower
courts. The Supreme Court does not even review lower court case law as a basis
for decision, only relying upon Supreme Court precedent.

The Supreme Court swats CAFC usage of TSM as inflexible, mouthing aphorisms
without any content of guidance.

We begin by rejecting the rigid approach of the Court of Appeals.
Throughout this Court's engagement with the question of obviousness, our
cases have set forth an expansive and flexible approach inconsistent with
the way the Court of Appeals applied its TSM test here. To be sure, Graham
recognized the need for "uniformity and definiteness." 383 U. S., at 18. Yet
the principles laid down in Graham reaffirmed the "functional approach" of
Hotchkiss, 11 How. 248. See 383 U. S., at 12. To this end, Graham set forth
a broad inquiry and invited courts, where appropriate, to look at any
secondary considerations that would prove instructive. Id., at 17.

Design patents are obvious if their combination of design elements can be
found, in toto, in the prior art. This is a huge step from the CAFC approach of
prior art having to have addressed the same problem to be combinable. SCOTUS
sets the bar of
patentability for utility patents such that an unexpected must result,
or a combination is old hat. Combining "prior art elements according to their
established functions" is "predictable."

Neither the enactment of §103 nor the analysis in Graham disturbed this
Court's earlier instructions concerning the need for caution in granting a
patent based on the combination of elements found in the prior art. For over
a half century, the Court has held that a "patent for a combination which
only unites old elements with no change in their respective functions . . .
obviously withdraws what is already known into the field of its monopoly and
diminishes the resources available to skillful men." Great Atlantic &
Pacific Tea Co. v. Supermarket Equipment Corp., 340 U. S. 147, 152 (1950).
This is a principal reason for declining to allow patents for what is
obvious. The combination of familiar elements according to known methods is
likely to be obvious when it does no more than yield predictable results.
Three cases decided after Graham illustrate the application of this
doctrine.

In United States v. Adams, 383 U. S. 39, 40 (1966), a companion case to
Graham, the Court considered the obviousness of a "wet battery" that varied
from prior designs in two ways: It contained water, rather than the acids
conventionally employed in storage batteries; and its electrodes were
magnesium and cuprous chloride, rather than zinc and silver chloride. The
Court recognized that when a patent claims a structure already known in the
prior art that is altered by the mere substitution of one element for
another known in the field, the combination must do more than yield a
predictable result. 383 U. S., at 50-51. It nevertheless rejected the
Government's claim that Adams's battery was obvious. The Court relied upon
the corollary principle that when the prior art teaches away from
combining certain known elements, discovery of a successful means of
combining them is more likely to be nonobvious. Id., at 51-52. When
Adams designed his battery, the prior art warned that risks were involved in
using the types of electrodes he employed. The fact that the elements worked
together in an unexpected and fruitful manner supported the conclusion that
Adams's design was not obvious to those skilled in the art.

In Anderson's-Black Rock, Inc. v. Pavement Salvage Co., 396 U. S. 57
(1969), the Court elaborated on this approach. The subject matter of the
patent before the Court was a device combining two pre-existing elements: a
radiant-heat burner and a paving machine. The device, the Court concluded,
did not create some new synergy: The radiant-heat burner functioned just as
a burner was expected to function; and the paving machine did the same. The
two in combination did no more than they would in separate, sequential
operation. Id., at 60-62. In those circumstances, "while the combination
of old elements performed a useful function, it added nothing to the nature
and quality of the radiant-heat burner already patented," and the patent
failed under §103. Id., at 62 (footnote omitted).

Finally, in Sakraida v. AG Pro, Inc., 425 U. S. 273 (1976), the Court
derived from the precedents the conclusion that when a patent "simply
arranges old elements with each performing the same function it had been
known to perform" and yields no more than one would expect from such an
arrangement, the combination is obvious. Id., at 282.

The principles underlying these cases are instructive when the question
is whether a patent claiming the combination of elements of prior art is
obvious. When a work is available in one field of endeavor, design
incentives and other market forces can prompt variations of it, either in
the same field or a different one. If a person of ordinary skill can
implement a predictable variation, §103 likely bars its patentability. For
the same reason, if a technique has been used to improve one device, and a
person of ordinary skill in the art would recognize that it would improve
similar devices in the same way, using the technique is obvious unless its
actual application is beyond his or her skill. Sakraida and Anderson's-Black
Rock are illustrative - a court must ask whether the improvement is more
than the predictable use of prior art elements according to their
established functions.

Courts should scrutinize combination patent claims with a care
proportioned to the difficulty and improbability of finding invention in an
assembly of old elements.

The appeals court TSM test limited combining prior art references to those
which went to the solving the same problem. The Supreme Court ruling trashes
that concept - now, anything under the sun known to man is prior art, but the
reasoning for combination should be explicit.

Often, it will be necessary for a court to look to interrelated teachings
of multiple patents; the effects of demands known to the design community or
present in the marketplace; and the background knowledge possessed by a
person having ordinary skill in the art, all in order to determine whether
there was an apparent reason to combine the known elements in the fashion
claimed by the patent at issue. To facilitate review, this analysis should
be made explicit. See In re Kahn, 441 F. 3d 977, 988 (CA Fed. 2006) ("[R]ejections
on obviousness grounds cannot be sustained by mere conclusory statements;
instead, there must be some articulated reasoning with some rational
underpinning to support the legal conclusion of obviousness"). As our
precedents make clear, however, the analysis need not seek out precise
teachings directed to the specific subject matter of the challenged claim,
for a court can take account of the inferences and creative steps that a
person of ordinary skill in the art would employ.

The Supreme Court, in revisionist mode, traces the history of the TSM test to
forge a hammer to gratuitously bash the appeals court, all the while claiming no
inconsistency between the TSM and Graham four-factor tests. By doing so, the Court
ignores more recent CAFC rulings demonstrating legally acrobatic flexibility to
the precipice of caprice using TSM.

When it first established the requirement of demonstrating a teaching,
suggestion, or motivation to combine known elements in order to show that
the combination is obvious, the Court of Customs and Patent Appeals captured
a helpful insight. See Application of Bergel, 292 F. 2d 955, 956-957 (1961).
As is clear from cases such as Adams, a patent composed of several elements
is not proved obvious merely by demonstrating that each of its elements was,
independently, known in the prior art. Although common sense directs one to
look with care at a patent application that claims as innovation the
combination of two known devices according to their established functions,
it can be important to identify a reason that would have prompted a
person of ordinary skill in the relevant field to combine the elements in
the way the claimed new invention does. This is so because inventions in
most, if not all, instances rely upon building blocks long since uncovered,
and claimed discoveries almost of necessity will be combinations of what, in
some sense, is already known.

Helpful insights, however, need not become rigid and mandatory formulas;
and when it is so applied, the TSM test is incompatible with our precedents.
The obviousness analysis cannot be confined by a formalistic conception of
the words teaching, suggestion, and motivation, or by overemphasis on the
importance of published articles and the explicit content of issued patents.
The diversity of inventive pursuits and of modern technology counsels
against limiting the analysis in this way. In many fields it may be that
there is little discussion of obvious techniques or combinations, and it
often may be the case that market demand, rather than scientific literature,
will drive design trends. Granting patent protection to advances that would
occur in the ordinary course without real innovation retards progress and
may, in the case of patents combining previously known elements, deprive
prior inventions of their value or utility.

In the years since the Court of Customs and Patent Appeals set forth the
essence of the TSM test, the Court of Appeals no doubt has applied the test
in accord with these principles in many cases. There is no necessary
inconsistency between the idea underlying the TSM test and the Graham
analysis. But when a court transforms the general principle into a rigid
rule that limits the obviousness inquiry, as the Court of Appeals did here,
it errs.

Hitting a nadir of logic, Kennedy pens a paragraph of tautology: "what is obvious is obvious."

In determining whether the subject matter of a patent claim is obvious,
neither the particular motivation nor the avowed purpose of the patentee
controls. What matters is the objective reach of the claim. If the claim
extends to what is obvious, it is invalid under §103. One of the ways in
which a patent's subject matter can be proved obvious is by noting that
there existed at the time of invention a known problem for which there was
an obvious solution encompassed by the patent's claims.

SCOTUS now puts the scope for prior art to what is known to one of ordinary skill in the art,
irrespective of the problem being solved, and not necessarily in the same
technical area, but in the broader "field of endeavor."

The first error of the Court of Appeals in this case was to foreclose
this reasoning by holding that courts and patent examiners should look only
to the problem the patentee was trying to solve. 119 Fed. Appx., at 288. The
Court of Appeals failed to recognize that the problem motivating the
patentee may be only one of many addressed by the patent's subject matter.
The question is not whether the combination was obvious to the patentee but
whether the combination was obvious to a person with ordinary skill in the
art. Under the correct analysis, any need or problem known in the field
of endeavor at the time of invention and addressed by the patent can provide
a reason for combining the elements in the manner claimed.

The second error of the Court of Appeals lay in its assumption that a
person of ordinary skill attempting to solve a problem will be led only to
those elements of prior art designed to solve the same problem. Ibid...
Common sense teaches, however, that familiar items may have obvious uses
beyond their primary purposes, and in many cases a person of ordinary skill
will be able to fit the teachings of multiple patents together like pieces
of a puzzle... A person of ordinary skill is also a person of ordinary
creativity, not an automaton.

The Supreme Court turns on its head CAFC logic with regard to "obvious to
try" - now, a patentee must demonstrate that a patented combination was not
obvious to try. In other words, like European patenting, declare an "inventive
step".

The same constricted analysis led the Court of Appeals to conclude, in
error, that a patent claim cannot be proved obvious merely by showing that
the combination of elements was "obvious to try." Id., at 289 (internal
quotation marks omitted). When there is a design need or market pressure to
solve a problem and there are a finite number of identified, predictable
solutions, a person of ordinary skill has good reason to pursue the known
options within his or her technical grasp. If this leads to the anticipated
success, it is likely the product not of innovation but of ordinary skill
and common sense. In that instance the fact that a combination was obvious
to try might show that it was obvious under §103.

While warning of hindsight bias, no border is drawn as to its creeping in.
SCOTUS eschews rules for case-by-case determination.

The Court of Appeals, finally, drew the wrong conclusion from the risk of
courts and patent examiners falling prey to hindsight bias. A factfinder
should be aware, of course, of the distortion caused by hindsight bias and
must be cautious of arguments reliant upon ex post reasoning. See
Graham, 383 U. S., at 36 (warning against a "temptation to read into the
prior art the teachings of the invention in issue" and instructing courts to
"'guard against slipping into the use of hindsight'" (quoting Monroe Auto
Equipment Co. v. Heckethorn Mfg. & Supply Co., 332 F. 2d 406, 412 (CA6
1964))). Rigid preventative rules that deny factfinders recourse to
common sense, however, are neither necessary under our case law nor
consistent with it.

In conclusion, the Supreme Court penned obviousness anthem, where "ordinary
innovation" is not patentable -

We build and create by bringing to the tangible and palpable
reality around us new works based on instinct, simple logic, ordinary
inferences, extraordinary ideas, and sometimes even genius. These advances,
once part of our shared knowledge, define a new threshold from which
innovation starts once more. And as progress beginning from higher levels of
achievement is expected in the normal course, the results of ordinary
innovation are not the subject of exclusive rights under the patent laws.
Were it otherwise patents might stifle, rather than promote, the progress of
useful arts. See U. S. Const., Art. I, §8, cl. 8. These premises led to the
bar on patents claiming obvious subject matter established in Hotchkiss and
codified in §103. Application of the bar must not be confined within a test
or formulation too constrained to serve its purpose.

In a coda, the Supreme Court boosts court power to grant summary
judgment, declaring resolution of the facts to be within judicial purview. "The
ultimate judgment of obviousness is a legal determination."

A separate ground the Court of Appeals gave for reversing
the order for summary judgment was the existence of a dispute over an issue
of material fact. We disagree with the Court of Appeals on this point as
well. To the extent the court understood the Graham approach to exclude the
possibility of summary judgment when an expert provides a conclusory
affidavit addressing the question of obviousness, it misunderstood the role
expert testimony plays in the analysis. In considering summary judgment on
that question the district court can and should take into account expert
testimony, which may resolve or keep open certain questions of fact. That is
not the end of the issue, however. The ultimate judgment of obviousness
is a legal determination. Graham, 383 U. S., at 17. Where, as here, the
content of the prior art, the scope of the patent claim, and the level of
ordinary skill in the art are not in material dispute, and the obviousness
of the claim is apparent in light of these factors, summary judgment is
appropriate.

The presumption of patent validity is stripped bare. Facing a
charge of obviousness, a patentee must demonstrate that the prior art taught
away, or create a combination far afield from what might be expected. In
hindsight, the crowd must applaud, "damn clever idea."

--

In 2005, the Supreme Court thought nothing of taking away personal property,
allowing local governments to abuse the right of eminent domain to condemn
property and divert it to another use that might bring the city more tax
revenue. With its ruling today, the Supreme Court has done the same with
intellectual property.

Posted by Patent Hawk at April 30, 2007 2:16 PM
| Prior Art

Comments

I'm in law school, and I just read KSR v. Teleflex for the first time in a textbook written by Loren & Miller of Lewis & Clark Law School.

The post-Depression, anti-monopoly doctrines seemed harsh, and why SCOTUS decided to swing back that direction in KSR is not clear to me. I supposed that the CAFC must have been letting way too many patent through. Setting the bar higher for 103-nonobviousness was supposedly a solution for a stiff CAFC, according to my IP-law professor. But after reading your contextualization of the TSM test application by the CAFC ("By doing so, the Court ignores more recent CAFC rulings demonstrating legally acrobatic flexibility to the precipice of caprice using TSM.") I have begun to wonder if KSR's reasoning is a pretext. Truly, what is there to prevent the "hindsight bias" except the next SCOTUS overcorrection?

Posted by: ceejay at October 6, 2010 3:02 PM

ceejay,

Thanks for tuning in, and your comment.

No doubt about it: Miss Hindsight put on her party dress and went to the prom on KSR's arm. Rumor and innuendo about how far she would go were rife three years ago.

Miss Hindsight certainly has been the pin-up girl at the patent office. The courts have been more tempered, but putting two and two together in hindsight is about as difficult as a criminal prosecutor getting a hungry grand jury to indict a ham sandwich.

SCOTUS popped its KSR cork as political knee-jerk: corporations were howling about lousy patents granted by slack examiners a decade earlier. Good guidance isn't exactly government's forte, and the Supreme Court is the cream of the crop.

It was entirely predictable that, post-KSR, the PTO Director, formerly a political hack, would be replaced by a corporate hack, coming from the very technology area the mule kick of KSR has been the strongest: computers. (David Kappos, from IBM)

The USPTO is at least consistent: examination on the merits remains a chimera. Only, post-KSR, the "YES" (we need the dues) stamp got replaced with "NO" can do. KSR certainly made examiner hand-waving easier.